Late January Economic Rant -Roger Mason
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"I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them." -Thomas Jefferson
The people who voted for poverty and slavery under Obama are weak minded. They want the government to "take care of them". They don't want to be responsible for their own lives, their own destiny. They really want something free from the government like free health care, free retirement, something for nothing. McCain was an equally bad choice of course. Only 2% voted libertarian for freedom.
The housing crash has at least two years to go. The media tells you that housing has "bottomed" and this is a good time to buy a house. The commercial crash is catching up with a vengeance. Take a look at every strip mall and shopping center in your town, and you see more empty stores every month. Soon you'll see entire shopping malls empty and abandoned. Take a look at the mortgage delinquencies on the chart below. This is not just about subprime loans at all. This includes both prime and subprime mortgages. People are just walking away from their houses, since the mortgage far exceeds the value of the house. The value of the house is falling by the month. There are about one million unsold homes sitting empty right now. The banks are stuck with houses they can't sell, and the banks are going bankrupt. Isn't that ironic! The housing crash will continue in 2009.
Watch J.P. Morgan Chase Bank. Their stock has collapsed 50% since October in only 90 days. Their income fell 76% in the last quarter. They are ready to go under, and the government just can't print enough Monopoly money to save them. This is one of the top six banks in the world. They lost half their net worth in three months. Now you can see The Much Greater Depression is going to be much worse than 1929. Do not keep any money in your bank except minimum checking needs. Store nothing in safe deposit boxes but non-financial papers. The entire banking system is falling apart.
Look at the oil chart above. Don't be fooled by low oil prices. Oil can and will do anything. We can only dream about $1.60 gasoline continuing. The Mideast is in flames and will only get worse. Always remember the price of oil is POLITICAL more than supply and demand. This makes oil a very bad investment because the price is not rational and determined by market factors. Expect higher oil prices.
You see low prices for silver and gold, and a seemingly strong dollar. Silver and gold supplies are declining, and demand is rising. People around the world can only buy these metals at high premiums to the fake COMEX paper price. This will change dramatically in 2009. Reality always wins. The current gold to silver ratio of 88 to 1 is going to head towards 15 to 1, and probably 10 to 1 (e.g. $3,000 gold and $300 silver). The only advantage for gold is that it is portable and easier to hide. Do not own paper silver like ETFs. Own bullion or good stocks. SST (Silverstone), ECU (ECU), FR (First Majestic), EXK (Endeavor), IPT (Impact), GGC (Genco), and USA (US) are seven solid producers (ECU will soon produce). (All are Canadian except Endeavor.) There are good reasons not to own the more famous mines like Hecla, Apex, Coeur d'Alene, Pan American, and Silver Standard. There are good non-producers like Silver Falcon and Silver Eagle, but these are much riskier than producing mines making money. Just remember that silver only comes from silver mines. We cannot do without silver and cannot replace it. Silver is real money and has been for thousands of years. We are out of silver and soon the industrial users will be fighting over it. If you lost money on your current silver mines buy more at these low prices. The fundamentals only get better by the day. Always remember the road to wealth is buy value and hold for the long term. When the general public rushes in to buy silver and gold that's when we'll have our third American Bubble. We had the Stock Bubble and the Housing Bubble, and the next will be the Precious Metals Bubble. When you see silver and gold on the cover of popular magazines, and all the lemmings are talking about them, that will be the time to sell and get out. That could be three years away or ten. We'll find out when we get there.
Forget what the stock markets are doing. It doesn't matter at all whether the DJI, S&P, or Nasdaq do. In the end they are all going to collapse. You have no choice but to put your money into silver (or gold). You can't invest in any stock market in the world. You can't put your savings into any currency in the world. All currencies are useless fiat (unbacked) paper. You cannot buy residential or commercial real estate. You cannot buy any kind of bonds, T-bills, commercial paper, or anything else like that. Oil can and will do anything. You can't store uranium. You can't hide cash under your mattress, as inflation will eat it up. There just is no choice here. The only real money for thousands of years has been silver and gold. The U.S. Constitution says that.
Think hyperinflation. That's the future. This cannot be overemphasized. Endless printing of unbacked, worthless Monopoly money that robs you unseen and silent. The ONLY thing that will protect you is putting your savings into silver and gold. You are doing to see inflation just like the Weimar Republic. Prices will keep rising and rising as the government keeps printing money 24 hours a day, 7 days a week.. Go to www.shadstats.com to see that M3 money printing (which the government refuses to publish anymore) is about 18%. You have to make 18% a year just to break even. People who are getting, say, 6% on an investment are losing 12% a year, and don't realize this.
Social Insecurity checks and welfare checks will buy less and less every week. Your paycheck will buy less and less every week. Taxes will go up on everyone including the poor. Obama lied about lower taxes, too. Socialism requires extreme taxes on everyone.
Folks, there is some negative news to share with you. Because of my great faith in Quaterra Resources (QTA) and their owners I have not been monitoring them. Quaterra is supposed to be a SILVER company, and it is our largest holding. This has changed. They now have seven projects, and only one of them is a silver mine. (And they only own half of that silver mine.) They own two copper mines and copper is going to do poorly in a depression. Please sell Quaterra if you own it. Yes, the price is down, but so are all the other good silver mines. Just put your money into the other seven mines. We will no longer list Quaterra and will sell ours. I apologize for not monitoring this company because of my faith in what they used to be, and could be- a SILVER producer.
Want to hear something funny? The trade deficit has fallen! That's good news. It's fallen because Americans can't afford to import anything anymore. That's bad news. They're broke and can't buy any imports. Want to hear something else funny? California is broke and giving out IOUs to workers and for tax refunds. Try giving them an IOU for your taxes and see how you like a jail cell.
Obama is going to bring back the draft in 2009. Why wait? He already said, "If some go, all go." For some incomprehensible reason we're planning on attacking Pakistan. What did Pakistan do to us? The same thing Iraq and Afghanistan did- nothing. We're still trying to help Israel attack Iran, but can't get it together. Obama lied to everyone about, "bringing the troops home from Iraq" because that's what they wanted to hear. Obama will dedicate at least 50,000 military troops to keep order WITHIN the country. He knows people are going to riot and run amok as the economy goes to hell. FEMA has extensive detention camps. If you want to know more about them just google "FEMA camps" and your blood will run cold. Obama will start taking away your guns. Slaves can't own guns. This will be gradual, but unrelenting. He has been solidly behind every single anti-gun law in Congress. Thomas Jefferson also said, "No man shall ever be debarred the use of arms. The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government."
When the Australian government took guns from the citizens the crime rate went up. If you are a gun owner buy whatever guns, magazines, and ammunition you need. If you are not a gun owner consider owning some for self defense. Don't join the NRA as they sold out years ago. Please consider joining the Gun Owners of America (GOA).
Fifty million parasites are sucking up Medicaid every year. Obama will bring us Universal Government Health Care. This will be a disaster, as all government health care has been. This will also completely bankrupt us along with all the other welfare programs. People are already climging all over each other trying to get something for nothing. That's the American Mantra now- SOMETHING FOR NOTHING. When you give the government (any government) a dollar, you get ten cents back in services, and ninety per cent goes right down the toilet. Have you ever been to Canada, Western Europe, Australia, or New Zealand? The people are just as intelligent, educated, and hard working as we are. However, they have two thirds the standard of living. That's right, their standard of living stinks. Why? In one word...SOCIALISM. The government micromanages their lives from cradle to grave. We're already halfway there, and don't have long to go. Americans elected a hardline, avowed Marxist to run their country and now they're going to find out what that actually means in the real world.
True unemployment is about 16% now and headed to 30%. People are not going to be able to feed themselves, pay the utilities or keep warm. Private pensions and retirement funds are broke and won't be able to pay pensioners. Now, for the first time in American history, state, county, and city governments are broke and won't be able to pay pensions.
Social Insecurity was bankrupt decades ago and has been robbing Peter to pay Paul. Well, Peter is broke now.
2009 is going to be the worst year since the 1929 Great Depression. Prepare for it as best you can. Meanwhile go to www.kitco.com at least once a week and read the commen-aries. You can get good free newsletters from various websites. The more you read the more you'll know. Do exactly the opposite of whatever you see on CNBC and CNN.
Trust and faith and strength and courage will get you through the Much Greater Depression.
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